The Holiday Bonus and Paralegals – Should a Holiday Bonus Affect Overtime?

As the holidays approach, many companies around the country will be giving bonuses to their staff as a gift of thanks for the hard work they have put in all year.

For many paralegals, this is also the case. They will be rewarded for all of the time, effort, and long hours they have put in trying to help others seek the justice they deserve.

If you are a paralegal who is familiar with the Fair Labor Standards Act, you probably already know that bonuses should be included when factoring the regular rate of pay that determines overtime. Since very few paralegals are exempt from the FLSA, the nonexempt are entitled to overtime pay, or one and a half times their regular rate of pay for any hours worked over 40 in one week.

Miscalculation of the regular rate of pay can gravely affect your overtime rate, and this can happen when your bonus is not factored properly.

However, it is possible for your employer to exclude a Holiday Bonus or Gift from this rate, as long as certain criteria are present in the bonus. Here are those criteria:

• The bonus may not be dependent of the number of hours that the paralegal worked.
• Employers cannot give the Holiday Bonus based on production.
• Efficiency may not be a reason for a Holiday Bonus.
• The Holiday Bonus cannot be used as an employee motivator.
• A Holiday Bonus or Gift cannot be so large that the employee feels that it is a part of their wages instead of a “gift.”
• If a Holiday Bonus is given every year and therefore the employee expectation for it naturally occurs, it can still be excluded from the regular rate of pay calculation as long as all of the above criteria are met.

Even if one of the criteria is missing, the employee has the right to ask that the bonus money be included in the calculation, regardless of if the employer calls the extra pay a “Holiday Gift.” Unfortunately in this tough economy, there are some employers who are only looking out for their own well-being, even if it means it is at the expense of their dedicated employees.

If you are a paralegal who believes your Holiday “Gift” was given in a way that violates the Fair Labor Standards Act, call us. We can give you the facts – for free – and help you determine your rights. Kennedy Hodges, LLP offers a free case evaluation along with a free copy of our book, The Ten Biggest Mistakes that Can Hurt Your Wage and Overtime Claim, to all Texas employees. Protect your paycheck and call 888.449.2068 or fill out our online form today.